Day Traders Diary

11/24/20

The Dow Jones Industrial Average rallied on Tuesday, breaking above 30,000 for the first time amid positive vaccine news, hope for a strong economic recovery in 2021 and easing of political uncertainty as the Trump administration approved the start of the presidential transition.

The 30-stock Dow advanced 454 points, or 1.5%. At its high of the day, it traded at 30,116.51. Chevron rose 5% to lead the Dow higher. JPMorgan Chase and Goldman Sachs rose 4.6% and 3.8%, respectively.

Meanwhile, the S&P 500 climbed 1.6% to 3,635.41, notching a record close, and the Nasdaq Composite advanced 1.3% to 12,036.79. The small-cap Russell 2000 also hit an all-time high, gaining 1.9% to end the day at 1,853.53.

Tuesday's gains put the Dow up more than 13% for the month, which would be its biggest monthly gain since 1987. The S&P 500 and Nasdaq are up 11.2% and 10.3%, respectively, in November. It would be the Nasdaq's and S&P 500′s best monthly performances since April.

The Dow's rally to record levels has been driven in part by investors increasing their exposure to beaten-down value names. On Tuesday, the iShares Russell 1000 Value ETF (IWD) gained 2.1% and outperformed its growth counterpart, which advanced 1%.

Value stocks have been on fire this month as a slew of positive coronavirus vaccine data raised expectations for a swift economic recovery.

AstraZeneca said Monday interim analysis showed its vaccine has an average efficacy of 70%. Earlier this month, Pfizer and BioNTech also posted strong vaccine data along with Moderna.

Traders also cheered on Tuesday the increasing political clarity after General Services Administration chief Emily Murphy told President-elect Joe Biden that the Trump administration is making federal resources available for his transition into office.

Longer-dated Treasuries faced selling pressure amid the heightened level of bullishness in stocks, sending yields higher in a curve-steepening trade. The 2-yr yield decreased one basis point to 0.16%, while the 10-yr yield increased three basis points to 0.88%. The U.S. Dollar Index decreased 0.4% to 92.16. WTI crude rose 4.2% to $44.89/bbl.